Grapevine or Informed Selection: Significance of Quality Attributes in India’s Emerging Wine Market

Satish Y. Deodhar, Swati Singh and Nikita Tank

IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: Indian wine market is in a nascent state as compared to its counterparts in Europe, America and Asia. However, with rapid growth in GDP and consequent changes in lifestyle, the absolute size of the market is growing rapidly. The market size was about Rs. 3 billion in 2008 and by 2015 it had already reached Rs. 6 billion. Wine is a highly differentiated product, characterized by the presence of multifarious quality attributes. In this context, it becomes imperative to know the premiums attached to different wines and their attributes, resulting from selections made by producers and consumers. We undertake a hedonic price analysis of retail wine prices and their quality attributes. Results indicate that Ceteris Paribus, there is no premium attached to red wines in general over white wines. Reserve wines and a select few red wines do earn a premium though. Substantive premium is earned by foreign brands. Wines with higher alcohol content, club-shaped bottles, and cork closures carry a premium over other types of wines. Results may give cues both to producers and consumers on what new wines they could produce or consume.

Date: 2018-03-30
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